Are maize marketers averse to quality loss in supplies? A case study from Ghana

Abstract

To ensure sustainable post-harvest loss reduction, markets that are averse to quality loss and provide incentives for farmers to supply high quality produce are crucial. Such markets will be averse to quality loss, offering distinct prices and substantial rewards to farmers for the supply of quality produce. Farmers in sub-Saharan Africa (SSA), where informal markets exist, have often assessed the rewards for the supply of quality produce as inadequate. Hence, this study investigates if intermediary buyers are actually indifferent to quality loss in supplies based on two scenarios-the informal market scenario and a hypothesized grade scenario. The analysis builds on survey data from marketers in two informal maize markets in Ghana. For the hypothesized grade scenario, random effect regression was used to examine the influence of marketer-specific characteristics on premiums offered to farmers over different quality levels. The findings suggest that although informal markets seem not to adequately value loss reduction, investing in institutional infrastructures, such as grades and standards can change this. Furthermore, interaction among marketers and association participation positively influences the value marketers place on quality loss reduction. The result highlights the importance of standard grading systems and collaborating with market groups in minimizing quality loss.JEL classifications: D81, L15, Q13

Consumers’ aversion to food safety risk associated with cowpea storage In Uyo, Akwa Ibom State, Nigeria

“…Food hazard information is assumed to be a valuable food safety resource for cowpea consumers and can enable them to make better purchase and consumption decisions in the bid to reduce their exposure to the hazard. Based on the theory of risk aversion and the principle of expected utility maximization, concepts from Goldberg and Roosen (2007) and Bassey et al (2018) are adapted and modified to derive a framework for assessing consumers' aversion to risks associated with cowpea storage after receiving hazard information. Consumers response to the hazard information were considered for two types of risks -that of buying cowpea stored with unsafe pesticide (purchase risk) and the health risk associated with consuming cowpea stored with unsafe pesticides (consumption risk).…”

“…The amount of c is such that in the worst case, the consumer is indifferent between when his expected utility is as given in equation 1 and when it is as given in equation 2. A payment for risk reduction or elimination, such as c, is a function of the extent of risk reduction expected (Bassey et al, 2018). Goldberg and Roosen (2007) showed that such a cost c is increasing in the risk reduction (r − ro).…”

Global and local food value chains in Africa: A review

“…Private investments in maize and wheat sectors are emerging but with a main focus on domestic markets (eg, for local breweries, animal feed, or other food processing industries). Cereal supply chains are often inefficient with a lack of coordination along the chain and mainly spot market exchange, substantial postharvest losses, and low quality (Bassey, Kuhn, & Storm, ; Daly, Hamrick, Gereffi, & Guinn, ). In Zambia, an important regional maize supplier, maize is increasingly produced by medium‐scale farmers (along‐side large‐scale commercial farms), resulting in tradable surpluses and entry of multinational grain trading companies (Jayne et al., ; Sitko, Burke, & Jayne, ; Sitko, Chisanga, Tschirley, & Jayne, ).…”